Items Tagged with 'General Motors Corp.'

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An Oklahoma man, who is the first to take General Motors to court over its faulty ignition switches, saw his credibility called into serious question when lawyers for the automaker accused him of committing mortgage fraud.

General Motors Corp. [stock GM][/stock] and Chrysler Holding LLC submitted their restructuring plans to the government Tuesday but came to the table with another request: an additional $21.6 billion in government aid. As of the additional $4 billion that had already been scheduled for distribution to GM Tuesday, the company has received a total $14.3 billion through the Treasury Department's Troubled Asset Relief Program.

The heat is on for General Motors Corp. [stock GM][/stock] and Chrysler Holding LLC, which are scheduled to submit their restructuring plans before end of day Tuesday. The companies, along with their financing divisions, have received a total $25 billion from the Treasury Department through the Troubled Asset Relief Program on the condition they release strategic plans to restructure their businesses, cut production costs and ultimately pay the government back the loans.

The U.S. Treasury Department on Tuesday released a Congressional report detailing the expenditures so far through the Troubled Asset Relief Program. What the report left out was information regarding the funds promised but not yet paid. For instance, when detailing the automakers' bailout, the report is careful to list the all of the various funds given (and promised) to General Motors Corp. [stock GM][/stock] and GMAC LLC, but fails to mention the $4 billion also promised to Chrysler LLC.

The Treasury Department stepped into the auto industry in a big way Monday evening, when it agreed to invest $6 billion to stabilize auto financing giant GMAC LLC, "as part of a broader program to assist the domestic automotive industry." Whether the infusion will help ailing mortgage arm Residential Capital, LLC, however, is another question entirely.

GMAC Financial Services announced the day before Christmas that its application to become a bank holding company had been approved by the Federal Reserve. GMAC Bank also said it had received approval from the Utah Department of Financial Institutions to convert to a state bank. "As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability," the company said in a press release.

Christmas came early this year to two failing automakers, who on Friday learned they have received the assistance they've so long asked for. Treasury Department secretary Henry Paulson will step into the ongoing fight relief with an announcement Friday he will use $13.4 billion in funds from the Troubled Asset Relief Program to bail out the failing automakers. General Motors Corp. is now set to receive $9.4 billion, while Chrysler Holding LLC will get $4 billion.

GMAC Financial Services, the mammoth auto and mortgage financing arm tied to U.S. auto giant General Motors Corp. [stock GM][/stock], said early Thursday that it had submitted an application to the Federal Reserve to become a bank holding company, in an attempt to access funds under the Treasury's capital purchase program. The move is not unexpected, as officials at GMAC confirmed that they were considering the application in late October.

Commentary

With the recent turnover in leadership at the Federal Housing Finance Agency, we may be standing at the precipice of great change in the government’s role in supporting the mortgage market through Fannie Mae and Freddie Mac.